HONG KONG, April 1 (Reuters) - Hong Kong and China are putting the finishing touches on a landmark deal that would encourage money managers to base operations in the former British colony to target the huge onshore market, a top regulator said on Tuesday.
Under the plan, called "mutual recognition of funds", Hong Kong is aiming to encourage money managers to base their funds and portfolio managers in the city as it looks to correct a historic skew that has reduced it to largely a sales and marketing hub for funds.
Not only would the deal give fund managers greater incentive to set up more Hong Kong-domiciled funds to gain access to the huge pool of savings on the mainland, it would also lead to more jobs in the city and consolidate Hong Kong's position as the leading asset management hub in Asia.
"We have agreed with the CSRC on all the requirements," Alexa Lam, deputy chief executive officer at the Securities and Futures Commission, the city's watchdog, said at the FundForum Asia 2014 on Tuesday, referring to the China Securities Regulatory Commission.
"So once the final administrative measures have been dealt with, we will make a joint announcement."
The deal will also encourage more Chinese fund houses to use Hong Kong as a platform to sell their funds to global investors. The city is already the first in implementing the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme that allows investors in Hong Kong to invest in the onshore markets in the Chinese currency. (Reporting by Nishant Kumar; Editing by Kim Coghill)